Not enough rich people to eat

WSJ the realities of taxing the rich

Progressives talk of solving all our problems by making the billionaires pay their “fair share” but of course even if we seized all they had, it wouldn’t cover a year of their spending plans. And of course, you can only eat your seed corn once.

Of note, the last paragraph makes plain how the Scandinavians pay for their welfare state.

11 thoughts on “Not enough rich people to eat

  1. If the rich aren’t rich enough to pay for everything, then paying their “fair share” is merely rhetoric, a distraction of sorts.

    That is, the real problem of government spending is government spending, but if you get people talking about the share of it that rich people fund, they won’t notice that government spending itself is too much or wrongly directed.

    In this context it helps to remember that every penny of government spending is a penny not spent in the productive economy. We all experience this effect in our daily lives: A penny spent on food is a penny not spent on clothing or shelter; in the same way, a penny not spent on clothing or shelter is a penny that can be spent on food.

    We should, as a rule, care more deeply about government spending in itself than about “fairness” in funding it.

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    1. Of course spending is the problem. Government at all levels consumes 1/3 of the GDP, more than twice what is sustainable.

      But how we fund it is important too. If we shift too much of the available capital from productive to non-productive hands through redistribution, the GDP becomes smaller and the fraction that government consumes increases even with steady spending.

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  2. I read a similar article the other day that listed the highest taxed European countries and I was shocked to see how low in earnings the highest marginal tax rate kicked in. In Demark the top marginal rate of 55.9% kicks in at just under $80k USD. That doesn’t even include 15% local taxes, VAT and other “contributions”. I guess if welfare state is all you know, you succumb to living in cubicles and eating the crumbs of mediocrity.

    Since the top 20% of wage earners in the US pays over 90% of all income taxes collected, the “fair share” crowd is blowing smoke. And we know what kind of smoke…

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  3. If we just collected the taxes that were owed we could cover a lot of deficit spending. Of course that means we have to actually fund the IRS rather than look at it as just another “enemy” that just sucks the joy out of hiding monies in Panama, etc. The numbers are astounding as in up to 80% of annual deficits. That would cover a big chunk of DOD spending.

    Click to access p1415.pdf

    https://www.brookings.edu/blog/up-front/2019/04/09/how-big-is-the-problem-of-tax-evasion/

    Add in loopholes that lower effective tax rates and we have a collection problem, not necessarily a rate issue.

    Now, if we are serious about cutting spending (neither party is to be truthful.), we should probably try to collect what is owed plus what should be owed (loopholes) then see where we are.

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    1. If taking everything the rich have isn’t enough, then increasing tax compliance among them would do even less.

      The point being that taxing the rich is only a slogan, the desired welfare state can only be funded by greatly increasing the taxes on the middle class.

      That we could have all they want by making the rich pay their fair share is a lie.

      We can’t have a European style social welfare state without European style taxes on the middle class. Good luck campaigning on that.

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      1. Our effective taxes are very low.

        Just collecting what is owed, according to the links I gave, could have added 600 billion in 2018. No changes needed except enforcement.

        Simplifying taxes was the selling point in 2018 along with a corporate drop in rates.

        Taxes in Northern European countries may be higher, but include healthcare and education, along with pensions and childcare. Subtract those expenses from our median family income and a truer picture emerges.

        We already have a payroll tax of 15% that everyone pays except high earners, whose effective rates become lower as income rises.

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        1. 600 billion is insignificant compared to the Democrat wish list.

          If you want to catch tax cheaters, do it on the low end, where unreported cash income and dependent fraud is rampant.

          Defrauding the Earned Income Tax Credit is a major industry.

          But no amount of enforcement at either end could satisfy the promises the Democrats have already made. And they have made those promises claiming no tax increase for those making under $400,000.

          That can’t be done. To keep those promises. middle class taxpayers would have to be paying at the rates we currently have for million dollar incomes.

          Again, try campaigning on that.

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          1. Build Back is projected by CBO to be 4.6 Trillion over ten years.

            600 billion per year is more than enough, $6Trillion, to cover that.

            Reagan was famous for “trust but verify”. We need to empower the IRS to do “verify” because we are supposed to trust Americans to pay their taxes, and they aren’t.

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          2. Did you read the article?

            600 billion is the ADDED cost of BBB. We are already running a trillion dollar a year deficit. Medicare for all would cost $33TRILLION over 10 years. $3.3trillion a year added to the deficit. And that doesn’t count the cost of the climate promises.

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        2. Exorbitant taxes equals Healthcare and college for who? The vast majority of healthcare spending occurs after age 55 by very few so I should be soaked my entire life to pay for someone else’s health issues and maybe need Healthcare in my golden years?
          https://www.healthsystemtracker.org/chart-collection/health-expenditures-vary-across-population/

          As of 2020, only 37.5% of the US over age 25 sctually “graduated” from a college or other higher learning. So 62.5% of the US should get soaked to pay for the others?

          Yeah, sell that in your campaign.

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          1. Chances are you’re “soaked” your entire life so we can all pay for your last years. That’s how insurance works.

            If you are jaded about not needing expensive healthcare does that mean “winning” is getting very sick so you get your money’s worth?

            Liked by 1 person

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